Apple Has Had Few Incentives To Start Making iPhones In The U.S.

Lashing out at Apple’s decision to shift iPhone production for the U.S. market to India, President Donald Trump threatened to impose a 25% tariff on the device unless Apple begins manufacturing it domestically, Michael Liedtke reported for the Associated Press (AP).

Trump initially exempted iPhones from his first round of tariffs, but the company still expects to incur $900 million in additional costs during that same period. I Photo: Apple

Apple has long relied on manufacturing in China, where it has invested tens of billions in massive factories and a well-integrated supply chain.

That dependency has made the company a target in Trump’s ongoing trade war. Earlier this month, Apple CEO Tim Cook revealed that most iPhones sold in the U.S. during the March–June quarter would be sourced from India.

Trump initially exempted iPhones from his first round of tariffs, but the company still expects to incur $900 million in additional costs during that same period.

Analysts estimate that the original $1,200 price tag for a China-made iPhone would jump to $1,500 due to tariffs. Should Apple relocate production to the U.S., that price could skyrocket to between $2,000 and $3,500.

The company faces major barriers to domestic manufacturing, including the time and investment required to rebuild its supply chain—an effort that would take years and cost billions.

These disincentives make it unlikely Apple will shift production stateside any time soon. Last fiscal year, the iPhone generated $201 billion in revenue, underscoring its central importance to Apple’s business model.